JetBlue selling airplanes

[Diversion]

Link to story

NEW YORK, Oct 6 (Reuters) - German charter carrier Blue Wings AG bought five Airbus A320 aircraft from discount U.S. airline JetBlue Airways Corp. (JBLU.O: Quote, Profile, Research), which was selling the planes to cut costs, Blue Wings spokesman Frank Lorentz said on Friday.

JetBlue spokeswoman Jenny Dervin said all the planes would be on their way to their new owner by mid-November.

Representatives of the airlines declined to comment on financial details of the deal.

In July, JetBlue said it expected a gain of about $6 million from the sale of the planes in the third quarter. New York-based JetBlue is selling the planes to cut capacity as part of a turnaround plan.

Blue Wings, a three-year-old carrier based in Duesseldorf, plans to start scheduled service next year. This summer, it ordered 20 Airbus A320 planes for $1.4 billion.

 

[B6Busdriver]

Link to story

NEW YORK, Oct 6 (Reuters) - German charter carrier Blue Wings AG bought five Airbus A320 aircraft from discount U.S. airline JetBlue Airways Corp. (JBLU.O: Quote, Profile, Research), which was selling the planes to cut costs, Blue Wings spokesman Frank Lorentz said on Friday.

JetBlue spokeswoman Jenny Dervin said all the planes would be on their way to their new owner by mid-November.

This is old news, announced during 2nd quarter earnings report. The real question is will they sell more than the 5 airplanes?

 

[wings396]

This is old news, announced during 2nd quarter earnings report. The real question is will they sell more than the 5 airplanes?

Either way, it is not a good sign for them to be selling off A/C to raise cash. Given the size of their fleet, this should be a big red flag as to what is going on behind the scenes. Do they need a turnaround plan already???

 

[B6Busdriver]

Either way, it is not a good sign for them to be selling off A/C to raise cash. Given the size of their fleet, this should be a big red flag as to what is going on behind the scenes. Do they need a turnaround plan already???

While JetBlue is a bit short on cash ($450 ish million) I don't think the airplanes were sold for that reason. They wanted slow down deliveries ASAP. They were able to do so for 07 but I would bet the penatlies to slow deliveries for the remainder of 06 would have been substantial.

 

[wings396]

While I can understand your reasoning, it is still troublesome that any A/C are being sold off at all. An Airline such as B6 that still has low costs, should still be able to continue to grow at a REASONABLE rate. I can recall when US started to sell off a few A/C at a time, it was to raise cash to pay the bills. To me this is a huge backwards step for B6 while thier competitors continue to grow their fleets.

 

[justaumechanic]

Ok before we get our panties in a wad!!

Lets look at 2006. Jetblue is taking delivery of 17 A320's and 17 E190's. That's 34 aircraft if I do my math right.

Then we sell off 5 A320's so we have a net gain of 29 aircraft. If my math is still right.

That's a growth rate of what in 2006? 22% or so. Seems to me to be pretty good if you ask me.

Lets compare that to US. How many aircraft did they add to their fleet this year? Was it 4 Airbus on the AWA side? Compare that to the number of aircraft returned. That gives you you a what? Negative growth rate.

So JetBlue grows at well over 20%, US shows negative growth yet US is awesome and JetBlue is sinking like a rock. I don't think so.

Smart move on JetBlue's part, maintain growth while getting rid of excess capacity and maintenance cost.

My opinion, JetBlue's growth rate next year is to high. 12 A320's and 17 E190's, to much to fast.

While I can understand your reasoning, it is still troublesome that any A/C are being sold off at all. An Airline such as B6 that still has low costs, should still be able to continue to grow at a REASONABLE rate. I can recall when US started to sell off a few A/C at a time, it was to raise cash to pay the bills. To me this is a huge backwards step for B6 while thier competitors continue to grow their fleets.

 

[Flufdriver]

justaumechanic...LCC made over $300 million with the "negative" growth last quarter and is expected to do better this quarter...how much did "Baby Blue" make with the 29 new airplanes. The problem with the "ex-Wall Street Darlings" is the competition is lowering it's overall cost and putting to heat on the newbies. Ladies and gentleman...the playing field is starting to level.

 

[lovinglcc]

Didn't i read somewhere too that the five aircraft are the oldest in the jetBlue fleet, and those that will be needing heavy maintenance soon?

If so, that's actually kind of a brilliant plan. Take on new aircraft, and rotate older ones out of the fleet and eliminate any/all heavy maintenance.

LCC did this with some airframes. They returned ones to heavy to the lessors, who then did the maintenance, only to re-lease them later on.

 

[wings396]

Ok before we get our panties in a wad!!

Lets look at 2006. Jetblue is taking delivery of 17 A320's and 17 E190's. That's 34 aircraft if I do my math right.

Then we sell off 5 A320's so we have a net gain of 29 aircraft. If my math is still right.

That's a growth rate of what in 2006? 22% or so. Seems to me to be pretty good if you ask me.

Lets compare that to US. How many aircraft did they add to their fleet this year? Was it 4 Airbus on the AWA side? Compare that to the number of aircraft returned. That gives you you a what? Negative growth rate.

So JetBlue grows at well over 20%, US shows negative growth yet US is awesome and JetBlue is sinking like a rock. I don't think so.

Smart move on JetBlue's part, maintain growth while getting rid of excess capacity and maintenance cost.

My opinion, JetBlue's growth rate next year is to high. 12 A320's and 17 E190's, to much to fast.

All of The A/C that US has returned since BK were leased. The ones that I spoke of were sold outright years prior to this. They were owned and sold to raise cash.

 

[WSurf]

Can't be good however! Kinda like using one credit card to make the payment on another! Sooner or later the heat will be on!!

 

[justaumechanic]

I never said JetBlue was brilliant. I mearly made a point about getting in a panic about unloading 5 aircraft.

Now lets take a quick look at LCC's profit.. It was all obtained on the backs of the employee's. Plain and simple.

LCC raped over a billion from its employee's, turns a profit of 300 mil so for the year it might make what 400 mil total. So the reality is they lost 600 mil because the employee's ponied up the rest..

Be realistic. The beauty of LCC's profits is based on smoke and mirrors. All you have to do is read the financial reports on them. Keep in mind they own nothing.

justaumechanic...LCC made over $300 million with the "negative" growth last quarter and is expected to do better this quarter...how much did "Baby Blue" make with the 29 new airplanes. The problem with the "ex-Wall Street Darlings" is the competition is lowering it's overall cost and putting to heat on the newbies. Ladies and gentleman...the playing field is starting to level.

 

[runway4]

Just took a ride down the JFK Expwy the other day on my way to catch a flight (now that I think about it, I was heading out on LCC -- strangely germain to this thread). I could see N526JB getting ready to be sold... was kind of sad, its little white tail and all. And it looked filthy. I see on Airways News Fleet Updates that 507 and 508 are also leaving the fleet, and those are two of the oldest (503 was the first in the fleet). Of course, sitting right next to 526 was 258, a brand-spanking new E190.

 

[cateringguy02]

Didn't i read somewhere too that the five aircraft are the oldest in the jetBlue fleet, and those that will be needing heavy maintenance soon?

If so, that's actually kind of a brilliant plan. Take on new aircraft, and rotate older ones out of the fleet and eliminate any/all heavy maintenance.

LCC did this with some airframes. They returned ones to heavy to the lessors, who then did the maintenance, only to re-lease them later on.

I know of one airline that is going with this plan. As the plane comes due for heavy check, since its a leased plane, return it and take delivery of a new plane. A one for one trade off. This came right from the COO.

 

[Flying Titan]

Didn't i read somewhere too that the five aircraft are the oldest in the jetBlue fleet, and those that will be needing heavy maintenance soon?

If so, that's actually kind of a brilliant plan. Take on new aircraft, and rotate older ones out of the fleet and eliminate any/all heavy maintenance.

LCC did this with some airframes. They returned ones to heavy to the lessors, who then did the maintenance, only to re-lease them later on.

You are correct. As I understand it, that's half of the strategy. The other half comes from the fact that the value of the planes is higher than anticipated. As a result, B6 turns a profit on the sale and avoids heavy maintenance while, in effect, slowing down near-term additions to its fleet.

 

[WSurf]

Yea.. but I bet you will see the EMB190's go up, while the A320's start leaving in faster numbers.
Doesn't JB have an option on another 100 EMB190's?